Page 24 - Finance for Non-Financial Managers
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Counting the Beans
The Role of the Finance Department
The Finance Department really has two fairly distinct jobs to
perform in most companies: managing the company’s financial 5
resources (“Finance”) and recording and reporting all its finan-
cial transactions (“Accounting”). Many of today’s mid-sized and
smaller companies don’t establish separate Finance and
Accounting departments within their organizations. A company
might instead have a chief financial officer who per-
forms or oversees the
finance functions for the Chief financial officer
company and oversees the (CFO) The job title of the
executive who is in overall
company’s accounting
charge of all the financial department
activities. Larger compa-
activities in all large companies and
nies will usually be fairly
most mid-sized ones. Smaller compa-
precise about their organi- nies might instead place their financial
zation and are likely to department under a vice president
have distinctly separate for finance or even a controller,
departments reporting to depending on how they define the
the CFO. responsibilities of these people.
Finance
The Finance Department can be an accumulation of diverse
functions, depending on the company. It may oversee such
areas as insurance and risk management, contract administra-
tion and pricing, internal auditing, investor relations, and more.
But at a minimum, Finance will likely be responsible for treas-
ury activities, often under an executive carrying the title of
treasurer or vice president for finance. His or her role will likely
include cash management, bank relations, investments, and
everything having to do with making sure the organization has
enough cash to do its job and has all its cash busily working or
productively invested.
Major activities like mergers and acquisitions, attracting
investors to a company seeking outside capital, and internal
management of public stock offerings—all traditional roles of
Finance—will usually fall within the Finance Department’s